Late payments are climbing as Australian struggle to pay bills on time

Mozo

Thursday 13 March 2014

Late payments are on the rise according to a national financial snapshot of 20,000 Australians by budget management company Pocketbook.

Late payments are climbing as Australians struggle to pay bills on time

During February, the proportion of bills paid late was 17 per cent, compared with just 12 per cent in January.

According to the study, the most likely bills to be paid late were council and strata rates (26 day average) and utilities (23 day average).

Credit card, personal loan and bank bills on average are paid 19 days late but make up 20% of all household bills according to the study.

New credit reforms were introduced this week and Australian consumers are being warned that poor payment history could have a detrimental impact on your ability to get a loan in the future as credit providers now have access to more information about what accounts you have, your credit limits and your repayment history.

There is also a positive side to the reforms. Andrew Duncanson, Research Director at Mozo said that the reforms for the first time give you the ability to show a provider your reliability in paying off debts.

"The changes are particularly good news for anyone who in the past may have had minor difficulties and younger people, who are just starting out their credit history and might use a small credit card to demonstrate their good repayment habits when it comes time to getting a car or a home loan," he said. 

Mr Duncanson also noted that in the future, lenders may also offer better interest rates to people who have shown that they always pay on time.

The study also highlighted just how many bills the average household has to pay each month. There were 10 key categories of bills ranging from mortgage/rent payments, banking (credit cards, accounts & personal loans), Insurance, car repayments, Entertainment (eg Foxtel), council/strata fees, school/childcare fees, phone/internet and other utilities.

To avoid late payment fees and negative marks on your credit history, Mozo advises consumers to take advantage of direct debit and/ or online banking facilities where you can schedule automatic payments on the bill due date.

   

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